Russian fund, NIIF to create $1bn corpus for infra push

Times of India, 15.10.2016

The $10-billion RDIF, a Russian sovereign wealth fund, will sign an agreement with National Investment and Infrastructure Fund (NIIF) to create a $1-billion corpus during the Brics summit this weekend in Goa. RDIF, which operates as a private equity fund, has $10 billion of reserved capital under management.

Speaking to TOI, Kirill Dmitriev, CEO, RIDF, said that both RIDF and NIIF will each contribute $500 million for equity investment in Indian infrastructure by Russian companies. The NIIF is the wealth fund set up by the government in the 2015 budget. "We will look at both acquisition of existing energy plants and maybe build new plants in infrastructure, including energy. Our focus will be on working with Russian companies interested in India," he said. RDIF already has 20 potential investment proposals.

RDIF has a broad view of infrastructure and it will also look at transport companies. "Automobile company Kamaz is interested in setting up a company in India and we will be interested to invest in that. There is a big interest for us in the transport machinery sector and in petrochemicals," said Dmitriev. The fund will have an investment horizon of seven years and will examine ticket-sizes ranging from $50 to $150 million.

The agreement to set up the fund is expected to be signed in the presence of Prime Minister Narendra Modi and Russian President Vladmir Putin. RDIF is also an investor in the first project funded by the New Development Bank (Brics Bank) which comprises small hydropower projects in Karelia, Russia. "We would like to fund similar hydro projects in India," said Dmitriev.

In the past, RDIF has followed the same model to invest in Russian companies. It has partnered with investors in China, UAE, Kuwait, Saudi Arabia.